Respuesta :
Answer:(1) 0.53, 0.49, 0.56 (2) $367,924.53, $134,694, $230,357 (3) $12,630 (4) $691,000
Explanation:
The question is not complete, here is the missing part of the question
Required
1 . Calculate contribution margin % for the company as a whole and per segment
2 Calculate the breakeven point in sales dollars for the company overall and for each segment
3 what would the net income/ loss be if you discontinue Division A
4 what would be the target sale for the company to increase operating income to $100,000
Here is the solution
1 . To calculate the contribution margin for the company
= Total contribution ÷ Total Sales
= 315,420 ÷ 591,000
=0.53
Contribution margin per segment
= Segment contribution ÷ Segment Sales
A = 108,780 ÷ 222,000
= 0.49
B = 206,640 ÷ 369,000
= 0.56
(2) To calculate the break even point in sales dollars for the company overall and for each segment
Overall = Total traceable fixed expenses ÷ Total contribution ratio
= 195,000 ÷ 0.53
= $369,924.53
For segment
A = segment traceable fixed expenses ÷ segment contribution margin ratio
= 66,000 ÷ 0.49
=$134,694
B = 129,000 ÷ 0.56
= $230,357
(3) The net income / loss if Division A was discontinued
Sales. 369,000
Less: variable expenses. 162,360
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Contribution margin. 206,640
Less: Traceable fixed expenses. 129,000
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Segment margin. 77,640
Less: Common fixed expenses. 65,010
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Net operating income. 12,630
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(4) To calculate the target sales to increase operating income to $100,000
Existing sales. 591,000
Add: increase in operating income 100,000
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Sales target. 691,000
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Answer:
1. Calculate contribution margin % for the company as a whole and per segment
- Company = 53.37%
- Div. A = 49%
- Div. B = 56%
2. Calculate the break even point in sales dollars for the company overall and for each segment
- company = $487,184
- Div. A = $134,694
- Div. B = $230,357
3. what would the net income/ loss be if you discontinue Division A
- $12,630
4. what would be the target sale for the company to increase operating income to $100,000
- $674,549
Explanation:
Total Company Division A Division B
Sales $591,000 $222,000 $369,000
Variable expenses $275,580 $113,220 $162,360
Contribution margin $315,420 $108,780 $206,640
Traceable fixed exp. $195,000 $66,000 $129,000
Segment margin $120,420 $42,780 $77,640
Common fixed exp. $65,010
Net operating income $55,410
contribution margin ratio:
company = $315,420 / $591,000 = 0.5337 or 53.37%
Div. A = $108,780 / $222,000 = 0.49 or 49%
Div. B = $206,640 / $369,000 = 0.56 or 56%
break even point:
company = ($195,000 + $65,010) / 0.5337 = $487,184
Div. A = $66,000 / 0.49 = $134,694
Div. B = $129,000 / 0.56 = $230,357
if division A is discontinued:
gain/loss = total sales - variable costs - traceable fixed costs - common fixed costs = $369,000 - $162,360 - $129,000 - $65,010 = $12,630
to increase operating income to $100,000:
the total increase in operating income = target operating income - current operating income = $100,000 - $55,410 = $44,590
to increase operating income by $44,590, you need to increase total sales by = $44,590 / 0.5337 = $83,549 + $591,000 = $674,549
